$£S PROJECT NAME: EMERGENCY FOOD CRISIS RESPONSE PROJECT MINISTRY OF AGRICULTURE AND FOOD SECURITY PROJECT GRANTS: IDA TFOA1813 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED JUNE 30, 2018 Prepared in accordance with the Cash Basis of Accounting Method under the International Public Sector Accounting Standards (IPSAS) Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 Contents 1. PROJECT INFORMATION AND OVERALL PERFORMANCE 1.1 Emergency Food Crisis Response Project 1.2 Project Information 1.3 Project Overview 1.4 Bankers 1.5 Auditors -Audit Chamber - South Sudan ii 1.6 Roles and Responsibilities i 1.7 Funding summary i 1.8 Summary of Overall Project Performance: iii 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES v 2.1 Approval of the Project Financial Statements v 3. REPORT OF THE INDEPENDENT AUDITORS ON THE EMERGENCY FOOD CRISIS RESPONSE PROJECT vi 3.1 Responsibility for the Financial Statements vi 3.2 Auditor's Responsibility vi 3.3 Opinion Error! 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30th JUNE 2018 8 5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2018 9 6. STATEMENT OF CASHFLOW FOR THE PERIOD 30TH JUNE 2018 10 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS 11 8. NOTES TO THE FINANCIAL STATEMENTS 12 8.1 Statement of compliance and basis of preparation 12 8.2 Proceeds from Domestic and Foreign Grants 14 Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 1. PROJECT INFORMATION AND OVERALL PERFORMANCE 1.1 Emergency Food Crisis Response Project Ministry of Agriculture and Food Security Name: The project's official is Dr. John Ogoto Kanisio Undersecretary of Food Security Objective: The key objective of the project is to support adoption of improved technologies for food production and storage, provide cash for food to eligible beneficiaries in the territory of the Recipient and to increase production and consumption of high quality food value for vulnerable households. Address: Project Management Unit Ministry of Agriculture and Food Security Ministries Complex, Juba South Sudan Tel: +211 955 314 838 1.2 Project Information Project Start Date: IDA H 9220 - 21 May 2014 and TFOA 1813 - April 14 2016 Project End Date: The projects end dates are 30th Jun 2017 and 30fh Dec 2017 Respectively. Project Manager: The project Manager is Mr Luka Kiwanuka Project Sponsor: The project sponsor is the International Development Association 1.3 Project Overview Line Ministry The project is under the supervision of the Ministry of Agriculture and Food Security Project numbers for P113586 and P151031 Respectively. 19220 and TFOAI813 Strategic goals of the The strategic goals of the project are as follows: project * Increased access to food for consumption by food insecure households or groups living in six ofthe most distressed counties of Southern Sudan and to increase productivity of highly notorious food Achievement of The project management aims to achieve the goals through the following strategic goals means: * -strengthening of farmer groups for increased diversification of locally produced foods * -adoption of improved food and nutrition practices * -strengthening institutional capacity to improve integration of Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 nutrition in agriculture Other important The project cost was initially US$ 5 million for three years (2008-2011) but background was revised to US $7.2million with an additional funding of US information of the $2.2million. An additional funding of US$3.Omillion was also received in project 2013, thus the completion date was extended to December 2013. The total funding received then was US$10.2million. Additional funds of US$7.53m and US$9m were received in November 2013 and May 2014 respectively. The closing dates forthese funds are April 2015 and June 2017 respectively. Additionally, TFOA 1813 was received in April 2016 and the closing date is 31st December 2017. Current situation that The project was formed to intervene in the following areas: the project was To support adoption of improved technologies for food production and formed to intervene Storage, and provide cash or food to eligible beneficiaries in South Sudan. Project duration The project started 4 April 2016 and closed on 31st December 2017 1.4 Bankers The following are the bankers for the current year: (i) Stanbic Bank -USD Acct 0200000057494 (ii) Stanbic Bank -SSP Acct 0200000000352 1.5 Auditors -National Audit Chamber - South Sudan The South Sudan National Audit Chamber and an External Auditor to audit the project. 1.6 Roles and Responsibilities The key persons who served in the project to the date of this report were Names Title designation Key qualification Responsibilities Mathew Gordon Undersecretary Administrator Oversees the project Dr. Edward Leju Project Coordinator Agricultural Extensions Supervisor/coordinator Director Luka Kiwanuka Project Manager Crop agriculturist Day today Mg. the Project Taban Elonai Focal Person Agriculturalist Linking the Project to the Ministry activities 1.7 Funding summary TFOAl813 is the Fifth (V) additional financing for a duration of 21 months, commenced 4 April 2016 to 31 December 2017 with an approved budget of US$ 2,700,000 equivalent to SSP 359,370,000 which fully received and disbursed. Hi Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 Below is the funding summary: Source of funds Donor Commitment- Amount received to Undrawn balance to date - 30/06/2018 date (30/06/2018 Donor SSP Donor SSP Donor SSP curecycurreniZy currency (A) (A) (B) (B') (A) -(B) (A')-(B') Grand USD SSP USD I SSP USD SSP IDA TFOA1813 2,7000,000 357,370,000 2,700,000 357,370,000 Total 2,700,000 357,370,000 2,700,000 357,370,000 1.8 Summary of Overall Project Performance: The Project developed a budget worth 2,700,000 M. 93% of the total budget was contracted to FAO for strengthening of farmers groups for increased diversification of locally produced goods, improved food and nutrition capacity and strengthening institutional capacity to intergrade nutrition to agriculture. All the above activities were successfully carried out within the timeline and the project closed on the 3 1 1 Dec 201 7 as per the grant agreement. Activities carried out over the years under EFCRP was effective and rated satisfactory in respect of attainment of the development objectives. All the project funds were disbursed within the project period except for a very small portion which was refunded by the implementing agent. Under this component, the project contributed in the increase of productivity of high nutrition value and built institutional capacity to support nutrition-sensitive agriculture. The following activities were carried. * Provided 5000 households with tools and other inputs, with beneficiaries receiving fishing kids * Provided 5000 households with investment vouchers to acquire 20000 chicken and 18,000 small ruminates.( Sheep or goats) * Provided vouchers to 6000 mothers of children under -five years of age and vulnerable households to access nutritious foods. * Trained 2500 beneficiaries on food processing and storage and 400 beneficiaries on fish net braiding, processing and preservation * Food and trained 18 mothers -to - mothers support to group with 450 mothers on income generation, Business skills and market linkages. * Facilitated the set up of small kitchen garden in Juba and Jur River counties for 2,300 beneficiaries * Enhance 4600 farming households' capacity to diversify local food production in order to improve * Financial procurement management iii Emergency Food Crisis Response Project Report and Financial Statements For the financialyear ended June 30, 2018 In General, the project has achieved the objective through the capacity building of the smaller holder's farmers in order to diversify their local food production and to improve access to nutrition rood and nutrition information; and support national, state and county level institutions working on agricultural sector.. Key Challenges encountered include: * Insecurity * Poor infrastructure to access target area to carry activities * Exchange rate Iv Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 2. STATEMENT OF PROJECT MANAGEMENT RESPONSIBILITIES The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRP project are responsible for the preparation and presentation of the Project's financial statements, which give a true and fair view of the state of affairs of the Project for and as at the end of the financial year ended on 30 June 2018. This responsibility includes: (i) maintaining adequate financial management arrangement and ensuring that these continue to be effective throughout the reporting period; (ii) maintaining proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Project; (iii) designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statement, and ensuring that they are free from material misstatements, whether due to error or fraud; (iv) safeguarding the assets of the Project; (v) selecting and applying appropriate accounting policies; and (vi) making accounting estimates that are reasonable in the circumstances. The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRP project accept responsibility for the Project's financial statements, which have been prepared on the Cash Basis Method of Financial Reporting, using appropriate accounting policies in accordance with International Public Sector Accounting Standards. The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRPproject are of the opinion that the Project's financial statements give a true and fair view of the state of Project's transactions during the financial year/period ended June 30,2018 and of the Project's financial position as at that date. The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRP project further confirm the completeness of the accounting records maintained for the Project, which have been relied upon in the preparation of the Project financial statements as well as the adequacy of the systems of internal financial control. The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRP project confirm that the Project has complied fully with applicable Government Regulations and the terms of external financing covenants, and that Project funds received during the financial year/period under audit were used for the eligible purposes for which they were intended and were properly accounted for. 2.1 Approval of the Project Financial Statements The Project financial statements were approved by the Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRP pr?iect on the 18 May 2018 and signed by them. Undersecretar Coordinator Date: / _Date " - v Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 3. REPORT OF THE INDEPENDENT AUDITORS ON THE EMERGENCY FOOD CRISIS RESPONSE PROJECT REPORT ON FINANCIAL STATEMENTS We have audited the accompanying financial statements of EFCRP, set out on pages 9 to 17 which comprise the statement of receipts and payments for the financial year ended June 30, 2018, and a summary of significant accounting policies and other explanatory notes. 3.1 Responsibility for the Financial Statements The Undersecretary for the Ministry of Agriculture and Food Security and the Project Coordinator for EFCRP project are responsible for the preparation and fair presentation of these financial statements in accordance with International Public Sector Accounting Standards (IPSAS). This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. 3.2 Auditor's Responsibility Our responsibility is to express an independent opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depended on our professional judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we considered the internal controls relevant to the company's preparation and fair presentation of the financial statements in order to design audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the company's internal controls. An audit also includes evaluating the appropriateness of accounting polices used and the reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 3.3 Basis for Disclaimer of Opinion Out of the total expenditure incurred during the period of USD 2,711,645, I could not audit a total of USD 2,500,000 incurred by FAO. I therefore did not obtain sufficient and appropriate audit evidence on 92% of the expenditure reported during the period. vi Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 3.4 Opinion Based on the significance of the matter described in the Basis of Disclaimer of Opinion Paragraph, I have not been able to obtain appropriate and sufficient audit evidence to provide a basis for an audit opinion. Accordingly, I do not express an opinion on the financial affairs of the Emergency Food and Crisis Response Project for the financial year/period ended June 30, 2018. REPORT ON PROJECT PERFORMANCE AND VALUE FOR MONEY ACHIEVEMENT Based on our audit, we report that nothing came to our attention to indicate substantial non- achievement of value for money objectives. However, we identified a few minor cases of non- achievement of value for money objectives, which have been included in our separate Management Letter to the Undersecretary for Ministry of Agriculture and Forestry and the Project Coordinator. REPORT ON COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS Based on our audit, we report that nothing came to our attention to indicate substantial non- compliance with applicable laws and regulations, as well as essential external financing covenants. However, we identified a few minor cases of non-compliance, which have been included in our separate Management Letter to the Undersecretary for Ministry of Agriculture and Forestry and the Project Coordinator. REPORT ON CONTRACTS WITH DEBARRED FIRMS Based on our audit, we report that nothing came to our attention to indicate that debarred firms, both by the government and external financiers, were awarded any contracts under the Project during the financial year/period under review. Auditor General, REPUBLIC OF SOUTH SUDAN Date vii Emergency Food Crisis Response Project (EFCRP) Reports and Financial Statements For the financial year ended June 30, 2018 4. STATEMENT OF RECEIPTS AND PAYMENTS FOR THE PERIOD ENDED 30th JUNE 2018 2017/18 2016/17 Accumulative Receipt USD $ USD $ USD $ Transfer from Grant IDA TFA183 8.1 2,700,000 97,023 18,940,545 Total Financing 2,700,000 97,023 18,940,545 Available for Utilization 2,700,000 97,023 18,940,545 Expenditure by Component 1.Support to Agricultural Productivity 8-2 - 97,023.16 6,892,491 2.Strentening community safety Net 8.3 - 6,709,954 3.Support to improve Nutrition & Outcome 8.4 2,500,000 2,500,000 3.Project Management and M & E 8.5 211,645 43,751 2,837,819 Total Expense 2,711,645 140,774 18,940,264 Surplus /Deficit for the Year 11,44.93 (43,751 280 The accounting policies and explanatory notes to these financial statements are an integral part of the financial Statements. The financial statement were approved on the --------------- Undersecretry Project Coordinator Date Date 9 Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 5. STATEMENT OF FINANCIAL ASSETS AND LIABILITIES AS AT 30TH JUNE 2018 Financial Assets 2017/18 2016/17 USD USD Cash and Cash Equivalents Bank Balances (DA) 232.60 994. 15 Advance to RRP/ADP - 10,791.04 Imprests and Advances 47.84 140.15 NET FNANCIAL POSITION 28DAA 11,925.34 REPRESENTED BY: Cash and cash equivalents b/fwd 2017 11,925.33 51,392 Surplus/Deficit for the year (11,644.93) (43,751) Adjustments of Audit Fees 4,285 NET FINANCIAL POSITION USD 280.40 11,925 The accounting policies and explanatory notes to these financial statements form an integral part of the financial statement. The financial statements were approved on 29th Sept 2018 and signed by: Undersecretary Project Coordinator Date 2 2 Project Coordinator 10 Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 Date:----------------------------- Date:------------------------------ 7. STATEMENT OF COMPARATIVE BUDGET AND ACTUAL AMOUNTS Original Final Actua on Variane % of Receipts/Payments Item Adjustments Comparab Budget Budget le Basis e Variance a b c=a+b d e=d-c f=e/c % Receipts IDA H9220 0 11,925 11,925 % IDA/INRD TFOA1813 2,700,000 0 2,700,000 2,699,720 -280 -0.01% Total Receipts 2,700,000 0 2,700,000 2,711,645 11,645 -97% Payments as per categories 1-IDA H9220 Consultancy/Services 0.00 11,925.330 11,925.330 0 2-IDA TFOA1813 Category 1 Good & Materials - 0 0.000 Grant 2,500,000 2,500,000 2,500,000 0.000 0% Consultancy/Services 149,685 149,685 140,323 (9,362) -6% Operating Expense 50,315 50,315 59,397 9,082 18% Total Payments 2,700,000 1 2,700,000 2,711,645 11,644.93 0% Note: The budget expenditure was fairly spent according to the planned budget. The variance is very insignificant. r Undersecretary Project Coordinator Date Date 1 Emergency Food Crisis Response Project Report and Financial Statements For the financialyear ended June 30, 2018 8. NOTES TO THE FINANCIAL STATEMENTS The principal accounting policies adopted in the preparation of these financial statements are set out below: 8.1 Statement of compliance and basis of preparation The financial statements have been prepared in accordance with and comply with International Public Sector Accounting Standards (IPSAS) with particular emphasis on Cash Basis Financial Reporting under the Cash Basis of Accounting. The financial statements are presented in United States Dollars, which is the functional and reporting currency of the Project and all values are rounded to the nearest one Dollar. The accounting policies adopted have been consistently applied to all of the years presented. The financial statements have been prepared on the cash basis following the Government's standard chart of accounts. The cash basis of accounting recognises transactions and events only when cash is received or paid out by the Project. i. Recognition of revenue and expenses The Project recognises all revenues from the various sources when the event occurs and the related cash has actually been received by the Project. In addition, the Project recognises all expenses when the event occurs and the related cash has actually been paid out by the Project. ii. In-kind donations In-kind donations are contributions made to the Project, in the forn, of actual goods and/or services rather than in money or cash terms. These donations may include vehicles, equipment or personnel services. Where the financial value of in-kind donations can be reliably determined, the Project includes such value in the statement of receipts and payments both as revenue and as an expense in equal and opposite amounts; otherwise, the donation is not recorded. iii. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and cash at bank, short-term deposits on call and highly liquid investments with an original maturity of three months or less, which are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value. Bank account balances include amounts held at the Central Bank of South Sudan and/or at various commercial banks at the end of the financial year/period. For the purposes of these financial statements, cash and cash equivalents also include short term cash imprests and advances to authorised public officers and/or institutions which had not been surrendered or accounted for at the end of the financial year/period. 12 Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 SIGNIFICANT ACCOUNTING POLICIES (Continued) iv. Pending bills Pending bills consist of unpaid liabilities at the end of the financial year/period arising from contracted goods or services during the year/period or in past years/periods. As pending bills do not involve the payment of cash in. the reporting period, they are simply disclosed as an Annex to the financial statements. When the pending bills are finally settled, such payments are included in the statement of receipts and payments in the year in which the payments are made. v. Budget The budget is developed on the same accounting basis (cash basis), the same accounts classification basis, and for the same period as the financial statements. The Project's budget was approved as required by Law and regulations issued by the Ministry of Finance and Economic Planning, as well as by the participating development partners, as detailed in the Government of South Sudan Budget Printed Estimates for the year. A high-level assessment of the Project's actual performance against the comparable budget for the financial year/period under review has been included in an annex to these financial statements. vi. Exchange rate differences The accounting records are maintained in United States Dollars, which is the main currency used for major payments under the Project. A smaller percentage of payments are however made in the South Sudanese Pound (SSP). Those transactions are converted into the United States Dollars using the exchange rates prevailing at the dates of the transactions. Any foteign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in the local currency are recognised in the statements of receipts and payments. vii. Comparative figures Where necessary comparative figures for the previous financial year/period have been amended or reconfigured to conform to the required changes in financial statement presentation. viii. Subsequent events There have been no events subsequent to the financial year/period end with a significant impact on the financial statements for the year ended June 30, 2018 13 Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 8.2 Proceeds from Domestic and Foreign Grants During the 12 months to 30 June 2018, we received grants from donors as detailed in the table below: Amount Grants Grants Grants Name of Donor Date received ceiVed received received Total amount in SSP received in donor as direct k in cash in kind currency payment* F12'018 FV 2018 USS USS Us$ kSs SSP Grants Received from Multilateral Donors (International Organizations) Proceeds from IDA TFOA1813 Oct-17 2,700,000 94,815 2,605,185 2,700,000 359,370,000 Total 1 2,700,000 94,815 2,605,185 2,700,000 359,370,000 The direct payment grants represent payments for goods and services done directly by the donor on behalf of the project. Projects should ensure that adequate support documents are requested from the donors to support this grant. 8.2 Other Grants, Transfer and Payments Jun-18 Jun-17 Accumulative USD$ USD $ USD$ Componenti-Support to Agric. Productivity Transfer to AAH, NPA HARD 97,023 6,896,777 97,023.2 6,896,777 Note to the Financial Statements Continue 14 Emergency Food Crisis Response Project Report and Financial Statements For the financialyear ended June 30, 2018 8.3 Other grants and Transfers and Payment Jun-18 Jun-17 Accumulative USD $ USD $ USD $ Component 2 -Strengthening Community Safety Net -Transfer to AAH, NPA & HARD 97,023 1,709,954 -World Food Program 5,000,000 97,023 6,709,954 Note to the Financial Statements Continue 8.4 Other grants and Transfers and Payment Jun-18 Jun-17 Accumulative USD $ USD $ USD $ Component 3-Support to improved Nutrition Outcome - Transfer to FAO 2,500,000 2,500,00 2,500,000 2,500,000 Note to the Financial Statements Continue Jun-18 Jun-17 Accumulative 8.5 Component 4 Project Management and M & E USD $ USD $ USD $ Consultancy 140,323 1,669,528 Works 130,969 Goods and Equipment - 52,700 Operation Cost 71,322 43,751 984,622 211,645 43,751 2,837,818 15 Emergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30, 2018 8.1 CASH AND CASH EQUIVALENTS CIFWD Jun- Jun-18 17 USD $ USD $ Bank accounts (Note 12A) 233 994 Advance payment /Ministry of Road Audit cost 0 10,791 Imprests and Advance-Line Ministry 48 140 Cash and Cash Equivalent Brought Forward 280 11,925 Cash and Cash Equivalent Carried C/FWD Jun-18 Jun-17 8.12A Bank Accounts USD $ USD $ Foreign Currency Accounts 233 945.72 CfC Stanbic Bank [A/C0200000057494] Total Foreign Currency balances 233 945.72 Local Currency Accounts CfC Stanbic Bank [A/c NO. 0200000000352] 0 48.42 Total local currency balances 0 48.42 Total Bank account balances 233 994.14 Impress at PIU 48 140 16 Jnergency Food Crisis Response Project Report and Financial Statements For the financial year ended June 30,2018 Jun-18 Jun-17 USD $ USD $ Bank accounts (Note 12A) 233 994.15 Advance payment /Ministry of Road Audit cost - 10,791.04 Imprests and Advance-Line Ministry 48 140.15 Cash and Cash Equivalent Brought Foreword 280 11,925 17